Australia in $82 bn LNG deal with Japan

Sydney: Australia has welcomed a 90 billion dollar (82 billion US) deal to supply liquefied natural gas (LNG) to a Japanese power company in what is believed to be the country`s biggest export sales contract.

Western Australia state Premier Colin Barnett said the long-term gas sales agreement between Chevron and the Tokyo Electric Power Company would see 4.1 million tonnes of LNG sent to Japan each year.

"In my judgement that would be the largest sales contract for any Australian export industry -- this is an historic agreement."

Barnett said the deal would underpin the future of a major offshore gas field and onshore processing development, known as the Wheatstone project, to be developed off the state`s northwest coast.

The premier said the latest deal indicated the massive change underway in the resource-rich state`s economy, which is aiming to position itself as a major source of LNG to Asia`s burgeoning economies.

"Currently, the state`s only LNG producer, the North West Shelf Joint Venture, has an annual capacity of 16.3 million tonnes," he said in a statement.

Projects already under way, including at the massive Gorgon field, will see the state`s capacity more than double, he said, adding that over the coming decade LNG production could double again.

In September, Chevron, Shell and ExxonMobil agreed to develop the Gorgon field, the world`s largest LNG plant, which along with other LNG projects planned for the Western Australia and Queensland over the next decade could see Australia challenge Qatar as the world`s major gas exporter.

The gas is liquefied for shipping abroad, where it is turned back into gas and distributed via a pipeline.